Great news today as Bank of Canada reduces Policy Rate by 25 bps, from 5% to 4.75%. This should result in Lenders reducing their Prime Rate by 25 bps to 6.95 in the next day or so. This is good news as it gives the Bank of Canada confidence that they can reduce our rates even if US doesn`t follow. How many drops we can make without US following is till to be seen.
As a result of todays announcement, Bond yields are dropping as well, it have dipped to the level we haven`t seen since mid March.
Few immediate impact on variable rate :
- Lower qualifying rate/stress test rate. ( Contract rate +2%) , which will lead a higher mortgage qualifying amount.
- Exiting variable mortgage payment amount changing, or payment amount not change, however principle payment part will be increased, also help reducing overall amortization.
- Payment decrease roughly $16 per month per $100,000 balance over a 25 years amortization.
Contact us for your rate quote and pre-approval .